Third-quarter quarterly gross domestic product growth data due out 10 a.m. in Beijing on Thursday is expected to show growth eased to 7.4% from a year earlier, down from 7.6% in the prior quarter, according to estimates by French bank Societe Generale.

“With China so important in creating money, and money supply growth in the developed world still flat on its back, a slowdown in China augurs for lower inflation — perhaps deflation — and higher real rates,” Napier told Marketwatch in an email Wednesday.

Since the Bretton Wood system was dissolved in 1971, allowing the gold’s value to be determined in the open market, prices have tended to do well when real rates of interest have been low, and poorly when they’ve been high, Napier said.

Napier wrote in his email: “With nominal rates close to zero, the market would be fearful about monetary policy responses — bad for gold.”

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